Feb. 20 (Bloomberg) -- Deadly clashes engulfed Ukraine’s
capital for the second time this week as European Union
negotiators held hours of talks with President Viktor Yanukovych
and his rivals to try to end the bloodshed.

A truce agreed on last night was shattered this morning as
skirmishes broke out at the protest camp on Independence Square.
While the Health Ministry reported seven killed, including two
policemen, the opposition Svoboda party said more than 60 were
dead. EU foreign ministers were locked in talks for most of the
day as police were given the green light to fire live rounds.

Violence in the country of 45 million, a key east-west
energy route, has snowballed this week amid frustration among
protesters that demands for snap elections and governance
changes were being ignored. Russian-backed Yanukovych ordered a
nationwide anti-terrorism sweep to end the three-month uprising.
Russia and the West blame each other for the escalation. The EU
imposed sanctions against those it deems responsible.

“The main task today is to stop the bloodshed, shooting at
people on the streets, which the authorities are responsible
for,” opposition leader Vitali Klitschko, the ex-world boxing
champion, said today in parliament. “First of all, the army
must be pulled back so brothers aren’t attacking brothers.”

A sniper killed demonstrators on the square, the Ukrainska
Pravda newspaper reported on its website. The Interior Ministry
claimed a sniper in the activists’ camp wounded 20 policemen
with gunfire. Sixty-seven officers are being held hostage by
demonstrators, according to ministry.

Putin Call

As the clashes escalated, parliament was evacuated and a
meeting between Yanukovych and foreign ministers from Germany,
France and Poland was switched to the presidential palace. After
six hours of talks, the ministers left to meet the opposition.

Yanukovych interrupted the gathering to make a phone call
to Russian President Vladimir Putin, whose spokesman Dmitry
Peskov denied speculation the Ukrainian leader was seeking safe
haven. He said crisis mediation was discussed and Russian human-rights ombudsman Vladimir Lukin was sent to Kiev.

The threat of sanctions encouraged opposition to take an
intractable position and is similar to “blackmail,” Russian
Foreign Minister Sergei Lavrov told reporters in Baghdad today.
Ukrainian extremists are trying to provoke a civil war, he said.

U.S. Outrage

The U.S. is “outraged” by the actions of Ukraine’s
security forces, White House spokesman Jay Carney said today in
a statement. President Barack Obama warned yesterday against the
involvement of the military, which budget cuts have reduced to
182,000 people from 800,000 at the 1991 Soviet fall.

The violence prompted Kiev Mayor Volodymyr Makeyenko to
quit Yanukovych’s Party of Regions, while 12 fellow deputies
called on police to stop using guns and urged lawmakers to
switch Ukraine back to a system of parliamentary, rather than
presidential, governance, a key opposition demand.

Yanukovych yesterday fired army chief Volodymyr Zaman and
replaced him with the head of the navy without explanation.
Ukraine also boosted security at its natural gas pipelines.

During an anti-terrorism operation, soldiers can legally
search civilian vehicles and stop car and pedestrian traffic,
according to the Defense Ministry. Security forces can used
combat weapons and live ammunition to protect civilians, recover
hostages and guard property, the Interior Ministry said today.

Weapons Seized

Activists have seized more than 1,500 guns and 100,000
rounds of ammunition from military bases, depots and state
buildings, the security service said, without elaborating.

The unrest isn’t limited to Ukraine’s capital.

Lawmakers in Lviv on the Polish border yesterday ousted
their Yanukovych-appointed governor, set up an autonomous
government and declared allegiance to the opposition. Protesters
seized government and security headquarters in at least four
other regions. Polish Premier Donald Tusk warned of civil war.

Ukrainian bonds have slumped. The yield on the government’s
$1 billion of notes due June jumped to a record 41.6 percent
yesterday before pulling back to 29.9 percent today. The cost to
insure Ukraine’s debt for five years against non-payment using
credit default swaps rose to the highest since 2009.

EU Pact

The standoff began Nov. 21, when Yanukovych pulled out of a
free-trade deal with the EU, opting instead for $15 billion of
Russian aid and cheaper gas. The opposition is seeking to
overturn constitutional changes that strengthened Yanukovych’s
powers and to put Ukraine on a path toward EU membership.

It also wants Yanukovych, who was elected in 2010 with 49
percent of the vote and whose party controls a majority in
parliament together with the Communists and individual deputies,
to call early elections. His term is due to end in March 2015.

While the burning tires that ringed Independence Square
last night weren’t evident this evening, the mood among the
protesters remained defiant.

“We’re here to defend our Kiev homeland from gangsters and
mobsters in police uniform,” Yasha, a 28-year-old masked
protester who declined to give his last name for fear of
reprisal, said today.